People v. Czirban

• Decision Date: 12 April 2022
• Docket Number: H048989
• Citation: 292 Cal.Rptr.3d 902
• Parties: The PEOPLE, Plaintiff and Respondent, v. Ian CZIRBAN, Defendant and Appellant.
• Court: California Court of Appeals Court of Appeals

292 Cal.Rptr.3d 902

The PEOPLE, Plaintiff and Respondent,

v.Ian CZIRBAN, Defendant and Appellant.

H048989

Court of Appeal, Sixth District, California.

Filed April 12, 2022

Certified for Partial Publication.^*

Mary Jo Strnad, by appointment of the Court of Appeal under the Sixth District Appellate Program, Scotts Valley, for Defendant and Appellant.

Rob Bonta, Attorney General, Lance E. Winters, Chief Assistant Attorney General, Jeffrey M. Laurence, Senior Assistant Attorney General, Donna M. Provenzano, Supervising Deputy Attorney General and Victoria Ratnikova, Deputy Attorney General, for Plaintiff and Respondent.

Danner, J.

Defendant Ian Czirban appeals from a victim restitution order imposed as a condition of probation following his conviction for several business-related crimes. Czirban's crimes came to light after a July 2016 accident that killed Robert Reagan III, while he was operating Czirban's bulldozer in aid of the California Department of Forestry and Fire Protection (Cal Fire) at a wildfire in Monterey County. A postaccident investigation revealed that Czirban did not have workers' compensation insurance.

The trial court convicted Czirban of procuring or offering a false or forged instrument, tax evasion, failure to collect, account for, or pay taxes, and misdemeanor failure to secure payment of workers' compensation insurance. The trial court suspended imposition of sentence, placed Czirban on felony probation for three years, and reserved the issue of victim restitution. Czirban appealed the judgment of conviction to this court.¹

While that appeal was pending, the trial court ordered Czirban to pay, as a condition of his probation, victim restitution in the amount of $70,667.56 to Morgan K., Reagan's partner and the mother of their two children.² Czirban now appeals that order. ( Pen. Code, § 1237, subd. (b).³ )

Czirban contends the trial court improperly awarded restitution for attorney fees because the award rests on a violation of the Workers' Compensation Act (the Act) related to a survivors' benefit paid to Morgan by the State of California. Czirban further claims that the restitution award is invalid as a probation condition because the attorney fees lack a rational nexus to his misconduct, are excessive, and were unreasonably calculated. Additionally, Czirban asserts that the trial court abused its discretion in awarding interest.

For the reasons explained below, we reverse the award of $22,485.13 in interest and remand to the trial court with directions. In all other respects, the order is affirmed.

I. FACTS AND PROCEDURAL BACKGROUND

Robert Reagan, III died on July 26, 2016, while operating Czirban's bulldozer at the Soberanes wildfire in Monterey County. Reagan was ejected from the bulldozer and crushed to death by it. An investigation into Czirban's business (Czirban Concrete Construction) commenced after the accident.⁴

In May 2018, the Monterey County District Attorney charged Czirban with seven crimes related to his business conduct: insurance fraud ( § 550, subd. (b)(3) ; count 1), workers' compensation fraud ( Ins. Code, § 11760, subd. (a) ; count 2), two counts of procuring and offering a false or forged instrument ( § 115, subd. (a) ; count 3 [occurring on or about March 15, 2016] and count 4 [occurring on or about May 2, 2014]), tax evasion ( Unemp. Ins. Code, § 2117.5 ; count 5), failure to collect, account for, or pay taxes (§ 2118.5; count 6), and misdemeanor failure to secure payment of workers' compensation insurance ( Lab. Code, § 3700.5, subd. (a) ; count 7).

After a court trial, the trial court convicted Czirban on counts 4 through 7 and found him not guilty on counts 2 and 3.⁵

In December 2019, the trial court suspended imposition of sentence and placed Czirban on felony probation for three years with various conditions. The court also reserved the issue of victim restitution and continued the case for a restitution hearing. Czirban appealed the judgment of conviction; this court decided that appeal in August 2021.⁶ ( Czirban I, supra , 67 Cal.App.5th at pp. 1078–1079, 282 Cal.Rptr.3d 817.)

While Czirban's appeal from the judgment was pending, the trial court proceeded to address the issue of victim restitution. In January 2021, the parties stipulated that the trial court could decide the issue upon written briefs and declarations in lieu of live testimony.

In a declaration submitted by the district attorney in support of restitution, Morgan K. declared that Reagan was her "significant other" with whom she had lived before the July 2016 accident and shared two minor children, C.R. and A.R. In 2015 and 2016, Morgan and the children "were financially dependent on [Reagan's] employment income." Shortly after Reagan's death, Morgan discovered that Czirban did not have workers' compensation insurance. "Concerned about the lack of insurance benefits for A.R., C.R. and [herself], [Morgan] retained legal counsel, Thomas Tusan ..., in approximately September 2016." Tusan filed claims on behalf of Morgan and her children with the Uninsured Employers' Benefits Trust Fund (UEBTF) "for death benefits and recovery of funeral expenses." "On or about April 8, 2020 – over 3 years and 9 months after [Reagan's] death, [Morgan] signed a Compromise and Release Agreement [(C&RA)] in the Workers' Compensation Appeals Board [(WCAB)] action Robert Reagan Deceased v. Czirban Concrete Construction, LLC, Et Al. (Case No. ADJ10613433)." (Italics added & underlining omitted.)

According to Morgan's declaration, under the C&RA, Morgan (as Reagan's putative spouse) and her children "were to receive a total payment of $310,218.80 for death benefits and funeral expenses, less $47,557.43 in professional fees and cost reimbursement to [her] attorney Mr. Tusan." Other documents in the record indicate that the C&RA's total settlement amount was apparently composed of $305,400.10 for death benefits, $3,613.27 for actual funeral/burial expenses, and $1,205.43 for legal costs "advanced by [Tusan,] who will be reimbursed." The C&RA did not include the attorney fees Morgan owed Tusan ($46,352). Morgan agreed that the state would pay Tusan his attorney fees directly and the settlement amount she and the children received would be reduced by the amount paid to Tusan.

The WCAB thereafter issued an "Order Approving Compromise and Release," based on the terms of the C&RA, and finding the settlement to be "reasonable and fair." The order specified the total amount payable to Morgan and the children, "less $1,205.43" in reimbursement for litigation costs to Morgan's attorney, and "less $46,352.00 for reasonable attorney fees." (Boldface omitted.)

Shortly after issuing the "Order Approving Compromise and Release," the WCAB issued a stay and "Notice of Intent to Approve Compromise and Release," which stated the "notice of intent to order approval of compromise and release is herewith issued," and that it would be vacated upon "a written showing of good cause within 20 days." (Some capitalization omitted.)

After the 20-day period had elapsed without any objection having been filed, the WCAB issued an "Order Reinstating Order Approving Compromise and Release" (WCAB order). The WCAB order directed the parties "to comply with the provisions of that order." (Capitalization omitted.) The service list for the WCAB order and the "Notice of Intent to Approve Compromise and Release" included multiple addresses for Czirban individually and for Czirban Concrete Construction.

In July and October 2020, Morgan received $131,330.68 from the State Compensation Insurance Fund (SCIF) (on behalf of Cal Fire) and another $131,330.68 from the UEBTF, for a total of $262,661.36. Morgan also "verified with Mr. Tusan that he ha[d] received his fees and costs of $47,557.43."

In her declaration in support of her restitution request, Morgan asked the trial court for "(a) the $625 in unpaid wages promised to [Reagan] by Mr. Czirban, (b) the $47,557.43 in attorney[ ] fees and costs that [she] paid to Mr. Tusan, and (c) legal interest of 10% covering the unpaid death benefits and funeral expenses ($310,218.80) - with that interest to be applied to the time frame between [Reagan]'s death on July 26, 2016 and the date of the signing of the C&R[A]: April 8, 2020."⁷ Morgan stated further that "but for Mr. Czirban's failure to have workers' compensation insurance, [she] would have received the death benefits within a month of [Reagan]'s death, rather than 3 years and 9 months later."

Additionally, the district attorney submitted the declaration of a Cal Fire employee, Genavina Mabary, regarding Morgan's and her children's claims and payments made by Cal Fire (through SCIF) to Morgan, her children, and Tusan. The district attorney also submitted a declaration by an employee of the California Department of Industrial Relations, Cynthia Co, regarding the claims and payments made by the UEBTF to Morgan, her children, and attorney Tusan. Co stated that the maximum available benefit under the law was $320,000. She also explained how the death benefit portion of the total lump sum benefit (i.e., $305,400.10) was calculated under statutory formulas governing a situation involving three or more dependents. The death benefit calculation used a "Weekly Disability Rate" ($416.65) that was "calculated from Reagan's reported 2015 earnings" and applied that rate to the period from Reagan's date of death through the date his youngest dependent would reach majority "and in consideration of the present value."

Mabary and Co described the process by which the C&RA was approved in 2020 by an administrative law judge of the WCAB, as summarized above, and stated that they were not aware of Czirban having disputed the C&RA or the WCAB's determination.

In the trial court, Czirban opposed Morgan's restitution request. Czirban argued that "[t]he People failed to prove a factual or legal basis for [the $47,557.43 in attorney fees and costs] because they failed to meet their burden of showing that...